As a contractor in New York, ensuring that you have the right insurance coverage is critical to protecting your business from various risks and liabilities. General Liability (G.L.) and Umbrella Liability policies are foundational components of a robust risk management strategy. This article will outline the key elements that should be included in these policies to provide optimal coverage.
1. Adequate Per Occurrence Limit
The cornerstone of any General Liability Policy is the per-occurrence limit, which determines the maximum amount the insurer will pay for a single claim. For New York contractors, it is advisable to have at least a $1 million limit per occurrence. However, given the potential for high-cost claims in the construction industry, a $2 million limit is often more prudent. This protects against significant incidents that could otherwise jeopardize your financial stability.
2. Blanket Additional Insured Coverage
Blanket additional insured coverage is a crucial feature to include in your liability policies. This provision automatically extends coverage to other parties, such as clients or subcontractors, without needing to add them individually. Ideally, this should come with no privity issues, meaning the additional insured parties are covered without requiring a direct contractual relationship with the policyholder. This flexibility is precious in construction projects’ fast-paced and complex environments.
3. Blanket Waiver of Subrogation
A waiver of the subrogation clause prevents your insurer from seeking reimbursement from third parties after paying a claim. A blanket waiver of subrogation ensures that this protection extends to all parties involved in a project, minimizing disputes and fostering smoother collaborations. This clause is essential for maintaining good working relationships and avoiding legal entanglements arising from claims recovery efforts.
4. Contractual Liability Coverage
Contractual liability coverage is another vital element that should be part of your G.L. policy. This coverage protects you when you assume liability for another party through a contractual agreement. In the construction industry, contractors frequently enter into contracts that include indemnity clauses, making this coverage indispensable for managing risks associated with these agreements.
5. Per Project Aggregate Limit
Your policy should include a per-project aggregate limit to ensure comprehensive coverage across multiple projects. This provision resets the aggregate limit for each project, providing dedicated coverage amounts per project rather than sharing a single limit across all projects. This is particularly beneficial for contractors handling several projects simultaneously, as it ensures that a claim on one project increases the available coverage for others.
6. Primary and Non-Contributory Coverage
Primary and non-contributory coverage ensures that your policy responds first in case of a claim without requiring contributions from other insurance policies that might also cover the incident. This is a crucial feature for subcontractors, as it aligns with the standard requirements of general contractors and project owners. It simplifies the claims process and avoids potential disputes over which policy should respond first.
7. Avoiding Hard Hammer Clauses for Independent Contractors
Understanding the nuances of hard, soft, and no-hammer clauses is crucial when it comes to contractor liability policies, especially regarding subcontractors’ insurance.
A hammer clause in contractor insurance is an exclusionary form that can be added to a general liability policy to limit or remove coverage based on the insurance status of subcontractors. It’s also sometimes called a “Sub-Warranty”.
The hammer clause makes the general contractor (G.C.) responsible for ensuring that their subcontractors have the coverage required by the policy. This can force the G.C. to maintain good risk transfer and document review practices. If a subcontractor doesn’t comply with the insurer’s regulations, the G.C. could risk their insurer not paying claims.
Insurance companies can add a “Hard Hammer Clause” or “Soft Hammer Clause” form. A Soft Hammer Clause can afford coverage if the subcontractor’s insurance does not comply with all G.C.’s insurance company’s requirements. In the event of a claim, it is usually subject to a high deductible.
Ideally, a Hammer Clause should not be attached to one’s policy; however, it is becoming increasingly difficult to find a carrier that will do so, at least for New York contractors.
8. Height Restrictions
Height restrictions are common in liability policies for contractors, limiting coverage for work performed above a certain height. It’s essential to clarify whether these restrictions apply to exterior, interior, or both types of work. Many policies may exclude coverage for work performed above two or three stories, significantly impacting contractors involved in high-rise construction. Ensuring you understand and negotiate these restrictions to align with your scope of work is crucial for comprehensive coverage.
9. Contractors Limitation Endorsement
Lastly, check if your policy includes a contractor’s limitation endorsement, specifying the work type covered. This endorsement can restrict coverage to certain construction activities, potentially excluding others. For instance, a policy might cover residential construction but exclude commercial projects. Ensure that the endorsement aligns with your business’s full range of services to avoid coverage gaps that could expose you to significant risks.
Why Choose BGES Group for Your Insurance Needs?
Navigating the complexities of liability insurance can be daunting, but BGES Group specializes in construction insurance and can tailor policies to meet your specific needs. Our experts understand the unique risks faced by New York contractors and can help you secure comprehensive coverage that protects your business from potential liabilities.
Gary Wallach, a seasoned insurance professional, leads our team with extensive experience and a commitment to providing personalized service. We work closely with you to understand your operations and risk exposures, ensuring your insurance program offers the best protection.
Contact Gary Wallach at 914-806-5853 or email bgesgroup@gmail.com to discuss your insurance needs and get a policy that fits your requirements perfectly.
By partnering with BGES Group, you can focus on your core business activities with the confidence that you are well-protected against unforeseen risks. Let us help you safeguard your business and achieve peace of mind through superior insurance solutions tailored to your needs.
BGES Group is one of New York, New Jersey, and Connecticut’s Construction Insurance Specialists representing 50+ companies, including all the BEST general & umbrella liability programs. We offer all the coverage needed, including property, builders’ risk, inland marine, general liability, umbrella liability, auto, bid & performance bonds, workers’ compensation, N.Y.S. disability, and group health. Our commitment to you goes beyond the policies we provide. We are always just a call, text, or email away, ready to assist you, even on weekends. We understand the importance of your business and are here to help you navigate any insurance challenges.
BGES Group are Workers’ Compensation Insurance Specialists for Tri-State Business Owners: Unhappy with your rates, company, being canceled, losses causing difficulty getting coverage, in the middle of an audit dispute, misclassified payrolls, or whatever your issue. We can help! We have special programs for Auto Services, Contractors (especially in New York), Limousine Services, Logistics Companies, Manufacturers, Recyclers, and Truckers; we can help ANY tri-state business owner. We are considered “Preferred Agents” for this one program that, if we can get you into, their pricing is excellent, offers long-term coverage stability, and can cover multi-state operations. The program takes the hassle out of doing annual audits, too.
If you want to speak with us, call Gary Wallach at 914-806-5853, click here to email, or visit our website.
Company: BGES Group, 216A Larchmont Acres West, Larchmont, NY 10538
email: bgesgroup@gmail.com
website: http://www.bgesgroup.com
© – Copyright – 2024 – BGES Group